Paritarian Social Funds in the Construction Industry

Introduction

The European sectoral social partners of the construction industry, EFBWW (European Federation of Building and Wood Workers) and FIEC (European Construction Industry Federation), in collaboration with the AEIP (European Association of Paritarian Institutions), developed this website with the aim of presenting an overview of the paritarian funds existing in the various member States in the construction industry.

Such paritarian funds are established, funded and managed by the social partners themselves and often fulfill a complementary role to the existing governmental structures, mainly in the area of vocational training, health and safety, sectoral pensions and paid holiday schemes.

Besides collective agreements the paritarian institutions also play an important role in bringing the social partners together and as such are the “engine” that promotes industrial relations. Often, these paritarian funds are also considered as the “cement” which holds together social partners and their industrial relations.

For this reason this website is part of a wider initiative aiming at further promoting the development of paritarian funds across the EU.

1. The construction industry

The construction industry is one of the leading industrial employers in Europe. In 2009 it represented:

a level of activity of 1,173 Bln.€ (nearly 10.4% of the EU27 GDP)

14.8 million workers (over 7% of total European employment and nearly 30% of industrial employment)

more than 3 million enterprises, of which approximately 95% with lessthan 20 workers.

The construction industry is not only one of the largest industrial employers in the EU, but also the engineof general employment policies. The impact of the sector on the economic, social and fiscal policy is of considerable importance for national authorities. The powerful multiplier effect of construction activity on related sectors has a significant impact on the overall employment as well: one job in the construction industry generates two new jobs in the overall economy. A strong employment policy in construction therefore has a positive impact on employment in general.

The built environment is also currently responsible for 42% of EU final energy consumption and produce about 35% of all greenhouse emissions. In this framework, without any doubt the construction industry plays a major role in ensuring the respect of the European Union’s objectives of reducing emissions of greenhouse gases, boosting the use of renewable energy and increasing energy efficiency, whilst at the same time creating significant job opportunities and business challenges.

The construction industry is characterised by specific elements by which the sector distinguishes itself from other sectors, such as for example:

the fact that it is not the “final product” that moves within the single market, but rather the enterprises and their workforces that have to move to where the “product” is to be constructed;

labour-intensive activity;

high mobility of its workforce;

the higher risk of (fatal) accidents;

linked to local traditions, climatic and cultural factors;

etc.

Due to these specific characteristics, the social partners (trade unions and employers) have a significant role to playin organising and regulating the construction industry via industrial relations. Their role is not limited to the traditional aspects of usual industrial relations such as, for example, wages, working conditions, health and safety, social protection, but it also aims at developing the long-term sustainability of the construction industry.

Through collective agreements and paritarian social funds for “vocational training”, “health and safety”, “occupational pensions”, “social security”, “quality standards”,… the social partners have proven that they are capable to regulate and promote a sustainable construction industry. At the same time the collective agreements and the paritarian institutions also play an important role in bringing the social partners together and as such are the “engine” that promotes industrial relations. Often, the paritarian social funds are also considered as the “cement” which holds together social partners and their industrial relations.

2. The role of paritarian funds in the construction industry

Almost all the existing paritarian social funds are established, funded and managed by the social partners themselves and often they fulfill a complementary role to the existing governmental structures.

In most of the Western Member States, such institutions exist, whilst in the Central and Eastern European Member States only a very limited number of initiatives in this area took place so far.

Paritarian social funds play a crucial role in the construction industry in the following areas, thereby helping setting the basis for its long term sustainable development:

Health and safety

A high incidence of work accidents(some of which with a fatal outcome), is unfortunately not an unknown phenomenon in the sector. Despite the improvements observed during the last few years, these problems remain a serious threat in the construction industry in all the Member States. Social funds on health and safety can significantly contribute to reducing occupational accidents. This is done particularly through prevention whichis an important part of the approach as it reduces economic costs resulting from accidents at work and from work-related illnesses.

Vocational training

Since about 50% of turnover is achieved through the labour of the workers, qualified workers are essential for the future of the sector. However, the construction industry suffers from a chronic shortage of (young) qualified workers. The current challenges to meet the EU’s climate change goals by 2020 and the needed labour market transition will not be achieved without additional efforts in vocational and professional training in the use of energy efficient techniques and renewable energies. Many existing paritarian social funds provide vocational training in order to stimulate "quality", “skilled workers” and "expertise" in order to provide to the construction industry the needed qualifications and skills.

Temporary unemployment

Due to the fact that the building process in the construction industry largely depends on external factors, such as weather conditions, deadlines, etc. many construction workers are cyclically unemployed. In order to put construction workers on an equal footing with comparable workers active in other industries with regard to social protection, many social funds have set up specific schemes to solve the problems of cyclical unemployment, e.g. supplementary pension schemes, supplementary unemployment benefit schemes, holiday pay schemes…

Supplementary pension schemes

Due to strong demographic and economic pressure the first pillar pension schemes in many member states are gradually becoming insufficient to ensure an adequate pension income at the retirement age. Due to the fragmentation of the sector, the third pillar pension scheme has hardly any success within the construction industry. Therefore, in various countries the social partners of the construction industry have set up paritarian supplementary pension schemes.

The aim of this website is therefore to promote and facilitate the dissemination of information on the existing paritarian funds in the various Member States, in order to encourage and promote their development across the EU.